Part 3: Politics snarl O'Hare

Andrew Martin and Laurie CohenTribune staff writers

The parochial and petty politics that have turned O'Hare International Airport into a treasure-trove for concessionaires and contractors also are at the heart of why the transportation hub is a quagmire of delays, hassles and heartaches.

The political self-interests that have gotten in the way of expanding the world's second-busiest airport--or building a new airfield--are quietly on display in the vaulted corridors of the United Airlines terminal.Buy a carton of cigarettes at the duty-free shop and some of your money finds its way into the pockets of Jeremiah Joyce, who has been one of Mayor Richard Daley's key political strategists.

Need a book or a magazine to pass the time? The airport's bookseller, W.H. Smith, has paid for political advice from mayoral pal Oscar D'Angelo, and its partners include Grace Barry and Barbara Burrell, friends of the mayor's wife.

Satisfy a sweet tooth and you're patronizing the candy shop partially owned by Rev. Clay Evans and Elzie Higginbottom, both influential supporters of the mayor in the African-American community.

Now, take a look at the passengers killing time because of delays or sleeping on rollaway cots because of cancellations. They're where they are because of politics too.

The hidden motives that determine everything from contracts to projections for growth at O'Hare have created an airport that works for the politicians, their friends and the airport's two major airlines, but not for the public.

Political wheeling and dealing at the airport extends to the debate over new runways and a new airport, though with much higher stakes and a wider impact on the tens of thousands of passengers traveling through O'Hare each day.

Daley seems determined to protect the cookie jar of jobs, concessions, contracts and economic largesse that is O'Hare. His administration, the Tribune has found, has manipulated statistics to downplay the need for a new airport near the Will County town of Peotone. At the same time, Daley has benefited from a friendly Clinton administration, which has stalled the Peotone proposal.

Opposing him are a Republican governor and other politicians trying to transform a soybean field in Peotone into another major airport that almost certainly would alleviate some gridlock and would placate constituents who live on the edge of O'Hare and are weary of airport noise and pollution.

At a time when other parts of the country are achieving political compromises to facilitate a surging number of air travelers with new runways and airports, the stalemate in Illinois is especially vexing.

U.S. Sen. John McCain (R-Ariz.) in September blamed local political squabbling for sacrificing the interests of the entire Chicago region and the nation.

"I say pox on all of them," McCain said recently in an interview. "Chicago is one of the most gridlocked places in America and a critical transportation hub. We can't get O'Hare expanded, and we can't build another airport. And those are the only two options."

Political dealmaking

The airport that clout built

O'Hare has been inexorably linked with politics and the Daleys since the day the airport--formerly a military airfield and orchard--opened in 1955. Its transformation into an aviation crossroads provides a lesson in Machiavellian politics and lucrative dealmaking.

The late Mayor Richard J. Daley was instrumental in breaking a long impasse between the city and the airlines, which had been reluctant to move from Midway Airport, then the nation's busiest, and cover the costs of a new airport.

Daley also resolved the sticky issue of how the City of Chicago could control an airport outside its borders. The solution: The city annexed 5 miles of Higgins Road, creating a controversial "O'Hare corridor" that linked the city with its new airport.

From the start, O'Hare was used by City Hall as a means to reward political allies. Richard J. Daley's administration, for instance, gave the right to sell flight insurance to a company that had hired Daley's City Council floor leader, Thomas Keane, and it handed millions of dollars in construction work to another company that employed Keane.

Since then, as annual flights have grown to about 900,000 and City Hall has received vastly more money to spend at the airport, the basic formula at O'Hare hasn't changed much.

O'Hare's budget for the coming year is $511 million, which is paid for by airline landing fees, terminal rentals, concession charges and parking revenues--though not by property taxes. Another $506 million is set aside for construction projects, paid for by bond issues, federal grants and a passenger ticket tax.

O'Hare helps Daley at election time. Airport vendors, concessionaires and other businesses tied to O'Hare--and their executives and lobbyists--donated about $360,000 to Daley's campaign in an 18-month period beginning in July 1998. Daley was re-elected in February 1999.

And Daley's political machine, as well as his loyalists and friends, benefits from the jobs at O'Hare. Due to the length of Daley's tenure, he has hired nearly 60 percent of the 1,900 employees who work for the city's Department of Aviation, which manages O'Hare, Midway and Meigs Field, according to a Tribune review of payroll records.

His administration has hired campaign workers and the sons, wives, nephews and brothers of City Hall insiders. For instance, the city employed the son of Cook County Sheriff Michael Sheahan, also named Michael Sheahan, in 1992. A campaign worker for Daley, the younger Sheahan is now the $65,000-a-year coordinator of security projects at O'Hare and Midway.

The city also brought in the brother of Ald. Patrick Levar (45th), who heads the City Council's Aviation Committee. Hired in 1990, Michael Levar is now a $77,500 supervisor of construction and maintenance at O'Hare.

Dominic Longo, a longtime Democratic operative who was convicted of vote fraud in 1984, was hired to supervise truck drivers at the airport one year after Daley was elected in 1989. He was moved to another city department five years later amid allegations that he had sold jobs and pressured workers to buy tickets to campaign events for Daley and others. Longo has denied the charges.

But the money paid for salaries is a fraction of the dollars paid to contractors for everything from engineering and architecture to snow removal. For example, the Aviation Department has contracts with 29 architectural and engineering firms totaling $356 million, $36 million worth of contracts for snow-melting and removal, and $660,000 for seasonal decorations.

The Cincinnati-based firm, which is now paid $12 million a year and has played a crucial role in the city's efforts to block Peotone, operated on the same no-bid city contract from 1968 to 1995, when it got another no-bid deal.

Besides donating to the mayor's campaign and charities overseen by Daley's wife, the firm hired Oscar D'Angelo as its political adviser shortly after Daley took office. It also has handed subcontracts to companies owned by Daley allies. Former campaign manager Carolyn Grisko helps with public relations, Democratic fundraiser Niranjah Shah does engineering work, and Chicago Housing Authority Chairwoman Sharon Gist Gilliam is a computer consultant.

United Airlines has used a similar formula. The biggest airline at O'Hare, United relies on the city for long-term, exclusive gate leases.

Besides donating hundreds of thousands of dollars to city-sponsored events, charities favored by the Daleys and political campaigns, United has hired the mayor's younger brother and his former chief of staff as lobbyists.

William Daley lobbied for United before he became U.S. secretary of commerce in the Clinton administration, and Gery Chico, now chairman of the Chicago school board, lobbies for United at City Hall.

A long battle

The fight for a third airport

Given the success of O'Hare--as an important hub in the nation's air traffic system, as an economic engine and as a source of patronage and contracts--it's not surprising that both Daleys wanted new airports, so long as they were subject to mayoral control.

But the push for a third airport has always bogged down in politics, statistical sleight of hand and mixed signals from Washington, D.C.

In the late 1960s, the elder Daley proposed building a major jetport on landfill in Lake Michigan, an idea that never flew because of cost and environmental concerns.

The idea of a third airport didn't gather steam again until the mid-1980s, when state officials were looking for sites for a third airport to relieve O'Hare, on the orders of the Federal Aviation Administration. The sites considered were in rural areas south of Chicago, including Peotone.

City officials had publicly argued that O'Hare and Midway could handle the region's aviation growth. But, privately, consultants were urging city officials to immediately find a Chicago site for a third airport so they wouldn't lose out to the suburbs.

A suburban airport probably would be controlled by a regional authority consisting of state officials, local lawmakers and, perhaps, Daley appointees.

In 1990, Daley dropped a bombshell, announcing plans for a $5 billion new airport at Lake Calumet on the city's Southeast Side.

The mayor argued that the new airport would take pressure off O'Hare and appease the northwest suburbs that were opposed to O'Hare expansion. He proposed to pay for the airport with a new $3 passenger ticket tax that Chicago Democrats pushed through Congress.

But the Lake Calumet proposal immediately hit turbulence because of concerns over its spiraling costs and resistance from South Siders who didn't want Midway shuttered. The airport plan fell apart after Republicans helped kill it in the state Senate in summer 1992, and Daley abandoned the idea.

By focusing attention on Lake Calumet, the city "succeeded again in preventing [the state] from making any meaningful progress towards developing a new airport in a suburban location," Landrum & Brown President Jeff Thomas wrote in a memo to city officials.

"Thus the city has conducted a protracted but successful guerrilla war against the state forces that would usurp control of the city's airports."

It also left Daley with a huge new pot of money, the passenger ticket tax, which has funneled more than $600 million into the city's coffers since it was passed by Congress in 1990. The city has spent the money on runway resurfacing, terminal upgrades and consultants' fees, but not on new runways or a new airport.

Lake Calumet was dead, but the battle for Peotone was just beginning. At the end of President George Bush's tenure, in 1992, the FAA approved $2 million to start the planning process for building an airport in Peotone.

But after President Clinton took office with some key campaign help from the Daley family, the Peotone proposal ground to a virtual standstill in Washington.

Under the Clinton administration, some of the mayor's staffers assumed key positions in the U.S. Department of Transportation and the FAA with oversight over new airports. For instance, Susan Kurland, former chief counsel for the city's Department of Aviation, was an associate administrator for airports for the FAA from 1996 to 1999.

Catherine Lang, a former assistant commissioner in the Department of Aviation, is now director of the FAA's Office of Airport Planning and Programming, which oversees the passenger ticket tax and approval for new airport projects. And Frank Kruesi, Daley's first chief of policy, was assistant secretary in the U.S. Department of Transportation from 1993 to 1997. He now heads the Chicago Transit Authority.

Daley and other Illinois Democrats also played a key role in the appointment of Clinton's first FAA administrator, David Hinson, former head of Midway Airlines.

A few months after Hinson's appointment, the Clinton administration pulled planning funds for the Peotone study, citing a lack of "regional consensus."

Illinois Transportation Secretary Kirk Brown--who handles the push for a Peotone airport under Gov. George Ryan, a Republican--recalled that Hinson told him he had favored Peotone but would "have to consult with the mayor" before he proceeded with the airport plan.

Hinson, in an interview, said he didn't remember that conversation with the mayor, though he recalled that Daley objected to a Peotone airport.

Four years later, while Kurland oversaw the program, the FAA quietly pulled the Peotone airport proposal off a list of planned airport projects eligible for federal funding. The Peotone project had been on the planning list since 1986.

Republican leaders maintain the Daley administration has used its influence in Washington to block airport approval.

"It's the mayor through his political influence," said state Senate President James "Pate" Philip. "He's been able to stop it."

The FAA denies that politics have affected its decisions on Peotone, and Kurland declined to comment.

Contributing to the lack of progress toward a Peotone airfield was fierce opposition from United and American Airlines, which dominate O'Hare and vowed not to use a third airport.

In 1995, United spearheaded a "Kill Peotone" campaign that included a letter from 16 airline executives to then-Gov. Jim Edgar voicing their displeasure, according to records.

American also sent a representative to Downstate chambers of commerce to recruit allies in its opposition to Peotone. The airline also has urged its employees who live in the northwest suburbs to press local officials to drop out of the Suburban O'Hare Commission, a coalition of suburbs that staunchly oppose O'Hare expansion.

The status quo benefits the airlines because they control 85 percent of the flights at O'Hare and, without a new airport, none of the other large carriers has an entree into the Chicago market.

But, once again, passengers are the losers in this economic equation. Many studies, including those by the U.S. General Accounting Office, have shown that passengers pay substantially more at airports dominated by one or two major airlines.

Statistical shell game

Ups and downs

The City of Chicago's political success in holding off a Peotone airport can also be traced to a powerful tool: questionable statistics.

For years, Chicago officials have engaged in a statistical shell game to mask the need for a new airport and to hide O'Hare's capacity woes.

As Jay Franke, Daley's first aviation commissioner, said in an interview, "Forecasts are generally made to order." Franke was ousted in 1992.

In the debate over airports, the key numbers are forecasts of how many passengers are expected to fly out of an airport. By comparing predicted demand to an airport's capacity--how many flights an airport can handle without excessive delays--airport officials try to determine whether a new runway or a new airport is needed.

Forecasts by City Hall's own aviation consultants have repeatedly indicated since 1980 that O'Hare is running out of room. But this became a problem when Peotone emerged as the leading option.

City officials have used a grab bag of tricks to fix the problem. They have changed the formula for devising forecasts and tossed aside forecasts that didn't match their arguments.

And they have insisted that O'Hare can handle more flights because of anticipated improvements in air traffic control that haven't yet materialized, records show.

For example, a 1993 forecast by Landrum & Brown showed that O'Hare would be out of capacity in two years.

"If this is the case, then why build anything at all except a new airport?" wrote Doug Trezise, another city consultant, in a 1993 memo to Chicago aviation officials.

The solution was simple: Change the formula.

The original calculation was based on how many passengers would use O'Hare if enough runways were built to meet the demand. City officials asked Landrum & Brown to base the new forecast on how many passengers would use O'Hare given its existing capacity.

The resulting numbers were much more palatable.

The numbers game continued two years later. Landrum & Brown came out with new forecasts that were uncomfortably close to predictions that state officials were using to tout the need for Peotone. But this presented a problem for the city.

"Clearly, the similarities between the L&B numbers and those developed by the [state's consultants] will make it more difficult for the city to debate the third-airport issue on the basis of demand forecasts," consultant Ramon Ricondo wrote in a 1995 letter to a top aviation official.

The Daley administration didn't change its position. It simply chose not to release the 1995 forecasts, the Tribune learned from court records.

Then, in 1998, the Daley administration pulled its best statistical stunt yet, again with the help of Landrum & Brown.

The consultants finally delivered a forecast that the city could not only live with but trumpet. The new figures were 25 percent lower than the previous prediction.

The forecasting change was made possible, in part, by careful manipulation of the numbers. Landrum & Brown plugged a population forecast into its formula that was lower than many other population estimates.

The lower number--which called for the Chicago area's population to grow at about half the rate of previous years--had the effect of dampening the aviation forecast.

Where Landrum & Brown had forecast 61 million passengers for the year 2015 in its 1995 study, it now predicted only 46 million passengers in its revised forecast. (Last year, about 36.3 million passengers boarded planes at O'Hare.)

"A realistic forecast proves a new rural airport is not necessary for the region," Landrum & Brown concluded in a summary of its findings.

Though it's too soon to say if Landrum & Brown's prediction is off the mark, one thing is certain: The population number it used was far too low. Already, the population in the Chicago region has exceeded the forecast for 2007 that Landrum & Brown used for its study, according to estimates by the U.S. Census Bureau.

"What L&B did was just go looking for low numbers," said Suhail al Chalabi, a state aviation consultant. "Nobody has used numbers this low before."

Officials at Landrum & Brown declined to comment.

Despite some misgivings, the FAA accepted the city's low forecasts for O'Hare, even though its forecasts show that the number of passengers at O'Hare will grow twice as fast in the next 15 years as the city predicts.

"The problem is one of political intrusion into the technical process," U.S. Rep. Jesse Jackson Jr. (D-Ill.) wrote in a Sept. 20 letter to Transportation Secretary Rodney Slater. "Mayor Daley has argued that there is no need for new runways, not at O'Hare and definitely not in the south suburbs.

"He has made sure the statistics agree," wrote Jackson, who believes a Peotone airport would help his district. "The aviation planning process in Chicago, once a national model, is being corrupted and is truly a technical disgrace."

Changing positions

Running from runways

The latest position out of City Hall is that it won't stand in the way of Peotone--"They can go build it," the mayor now says--and that new runways at O'Hare are unnecessary.

The Daley administration now says it can meet demand at O'Hare through a $3.2 billion building program called World Gateway that is under review by the FAA. It calls for new terminals, parking spaces and expanded light-rail service.

It does not call for new runways, and city officials contend O'Hare has sufficient capacity through 2012. Officials, however, decline to say exactly how many planes the airport can handle, and some experts think O'Hare is out of room now.

"On the whole, the system works awfully well," Aviation Commissioner Thomas Walker said in a recent interview. "We will have to get used to the occasional inconveniences."

Though it might be logical for the city to lobby heavily for additional runways at O'Hare, it would be bad politics.

If Daley were to argue for a new runway, his Republican foes likely would pounce on that as evidence that a new airport in Peotone is needed.

Also, the Republicans hold all the cards when it comes to O'Hare expansion. Final approval for new runways rests with the governor's office, and a Republican has been governor since 1977.

To make room for the runway, Daley would have to use the city's condemnation powers to take a significant chunk of Bensenville, a leader in the efforts to block an expansion of O'Hare. Among the properties the city would bulldoze are the Garden Horseshoe neighborhood--home of more than 2,000 people--as well as 28 businesses, a cemetery near St. John's Catholic Church and a water tower.

While Daley remains noncommittal on runways, his longtime supporters in the business community now say they are crucial to the future of O'Hare and the local economy. United Airlines and the Civic Committee of the Commercial Club of Chicago, an influential business group, say there is an immediate need for a new runway at O'Hare.

The Republican opposition to new O'Hare runways has been staunch. With political power bases in the airport's shadows, Philip, U.S. Rep. Henry Hyde (R-Ill.) and state Atty. Gen. Jim Ryan have fought on behalf of constituents who don't want jet noise to increase in their communities.

A suburban airport, which is supported by Gov. George Ryan and other key Republicans, also would give Republicans access to the aviation jobs and contracts that Daley now solely controls.

While Chicago remains mired in political gridlock, mayors and other governmental officials across the nation have risked political capital to increase capacity at their airports.

Since 1995, relatively little airport expansion took place nationally--a total of four new runways, five runway extensions and one runway reconstruction at nine of the 27 hub airports.

However, over the next eight years, the pace of construction will triple. Seventeen of the hubs are building or have plans for 17 new runways, 12 extensions and one reconstruction, all to be completed by 2008.

One important reason for the shift into high gear is that the opposition of neighboring municipalities to airport expansion is now being blunted or overridden. For decades, complaints about noise and pollution have kept airport expansion projects in check.

But increasingly, court officials and legislators are deciding those concerns are outweighed by the importance of the air traffic system to the U.S. economy and the needs of millions of air travelers.

"Virtually every other major airport in the country has added or is adding ground capacity," said R. Eden Martin, president of the Civic Committee of the Commercial Club of Chicago, whose members include the major airlines and which has opposed a major airport in Peotone.

"Why don't we do in Chicago what an enlightened airline industry, business community and political leadership was able to do in Atlanta?" Martin said.

In Atlanta, city, regional and state leaders came together in support of a new runway at Hartsfield International Airport, which is now outdistancing O'Hare as the world's busiest airport. Yet, in winning expansion, Hartsfield had one huge advantage over O'Hare: Partisan politics was never an issue because nearly all major political players in Atlanta and Georgia are Democrats.

Even so, negotiations took nearly a decade, and it wasn't until late last year that a key compromise was reached with College Park, a municipality that borders the airport and will be truncated by the new runway. The town got money to move a convention center and develop hotels, office buildings and car rental facilities. In return, it will lose 100 businesses and the homes of 2,500 people to demolition.

That's the same sort of price that Bridgeton, a middle-class suburb of St. Louis, is going to pay because of plans to expand Lambert-St. Louis International Airport.

Unlike College Park, Bridgeton has been in court, fighting the plans that would level six schools, at least two parks, six churches, 75 businesses and nearly 2,000 homes. But, in April, the Missouri Court of Appeals overruled the municipality's objections to the expansion, concluding, "The substantial benefits conferred by the operation of the airport on the public clearly outweigh the interest of Bridgeton. The expansion of Lambert Airport is essential to its survival."

Among the 27 hub airports in the U.S., O'Hare is the only one that hasn't built a new runway and has no plans to do so.

Former Gov. Edgar, a Republican who participated in the airport feud during his eight years in office, now says the time has come to forget politics and address a critical issue for the region.

"There's a good case for a new runway at O'Hare," Edgar said. "There's a good case for a new airport in the south suburbs. The longer we wait, the more acute the problem is going to be."